Federal contractors and federal jurisdiction

Cuomo v. Crane Co., No. 13-4510-cv (2d Cir. Nov. 13, 2014).

 The Brooklyn Navy Yard, circa 1965

The Brooklyn Navy Yard, circa 1965

Here’s a case about the interaction between the “federal contractor defense” and the jurisdiction of the federal courts. 

The federal contractor defense can be asserted by a company that has supplied equipment to the federal government and has been sued for injuries that the equipment caused. If the defense is successful, the company is immune from liability under state tort law. 

Joseph Cuomo was in the Navy. While in service, he was exposed to asbestos supplied by the Crane Company. His widow, Susan Cuomo, sued Crane in New York state court for causing his death. Crane then removed the lawsuit to federal court under the “federal officer removal” statute. That statute says that any person who was acting under an officer of the United States, when sued for acts performed “under color” of federal office, can remove the suit to federal court. The statute has been broadly interpreted—so broadly, in fact, that a company asserting a federal contractor defense can remove a case to federal court by invoking the federal officer removal statute.

Cuomo argues, though, that Crane shouldn’t have been allowed to remove the case to federal court. Now, remember that this is a jurisdictional issue, so the question isn’t whether Crane can actually succeed on the merits of its federal contractor defense. The question is simply whether it’s raised a non-frivolous federal contractor defense—a defense that, even if it doesn’t ultimately succeed, can at least be decided by the federal courts. The Second Circuit decides that Crane has indeed asserted a non-frivolous (a “colorable”) federal contractor defense, so the case must stay in federal court. The district court’s contrary judgment is reversed.